In the US, divorce rate has gone drastically high. Whatever maybe the reason for getting divorced, there are lot of complexities in a divorce process and one that tops the list is the divorce property settlement agreement.
In any divorce case, the toughest part is to come up with a satisfactory divorce property settlement agreement. As soon as a couple plans to get divorced, the first question that strikes the mind is “How the property will be divided?” It is also quite common to find couples enquire about property settlement laws even before filing a divorce petition in a local court.
What is divorce property settlement agreement?
This is a kind of legal agreement between a husband and wife where the division of their assets are clearly mentioned. Here division of both marital property and separate property are mentioned. All the kinds of the property bought by the couple during their marriage fall under maritial property category while any kind of asset bought by either of them separately before the marriage are termed as separate property. This legal agreement is important to lead a tention free life post marriage.
List of items included in a divorce property settlement agreement are:
- Real estate
- Any kind of business
- Shares owned by any of them
- Fixed funds in the Bank
- An interest in a Trust
- Jewelry items
Note: For property settlement only property acquired during the marraige can be listed for division. Any separate property owned by either of them before marriage cannot be included here.
Once the divorce property settlement agreement is passed by the court, it will include the following:
- main reason behind the decision to make the marriage end
- list of both maritial property and separate property
- division of property in divorce
- any kind of monetary awards
- child custody norms
- child visitation rules
- spousal support rules
- division of retirement plans (if any)
- division of military retirement plans(if any)
- division of federal employees retirement plans (if any)
- division of thrift savings plan (if any)
- division of civilian retirement(if any)
- anyting related to income tax
- bankruptcy if any) and its impact on property settlement agreement
Importance of Divorce Property Settlement Agreement:
Maintaining financial security is one of the most important aspects during a divorce process. It is the desire of every couple to come up with a satisfactory property settlement norms and it can be done in a legal way with the help of divorce property settlement agreement.
For couples having children, it would be really unfair if only one parent has to bear all the expenses of the children. Also there is no point for children to suffer just because their parents cannot get along. Moreover when any property is owned jointly, then both the parties are legal owner of them and it will be simply unfair from legal point of view if the property is not divided equally. These legal agreements are important from the point of view of your retirement benefits too.
The Process of Divorce Settlement Agreement:
While each divorce case is unique, the process of coming up with a divorce property settlement agreement also differs a lot. As per US divorce statistics, most couples prefer to come to an effective and suitable agreement regarding the division of property by having their matter resolved through mediation or negotiation. In this process once both the parties make the decision regarding what they wish to do, the mediator or the negotiator draws up a memorandum of understanding that specifies what issues have been resolved. Later a formal agreement is made by the attorney, which is filed along with the divorce petition in the court. The judge will have a look at the agreement and if everything is in order, he will sign the agreement to make legal.
However, if a couple cannot come to an agreement on their own regarding the division of property, the Court will do that. Determining what is a fair and just division of property can be a complicated process for the court also. There is a four step process when the court has to be made the final decision regarding a fair and agreeable divorce property settlement agreement:
The Four steps are:
First the Court identifies the net property value. Here the Court will make a list of all the property and then make an estimated value of it. Here everything that needs to be distributed is identified irrespective of who owns the property or how the property was acquired as part of the family law property settlement.
Once the Court identifies the net marital asset, it then assesses the contributions made by each of the parties towards the property. Here Section 79(4) of the Family Law Act is used to do so.Contributions may be any of the following such as direct financial contributions which includes the direct financial contributions to the acquisition of assets made by both the parties; and indirect financial contributions like when one party’s income is used to buy some assets. Apart from this non-financial contributions are also taken into consideration. Such contributions are made in a marriage as a homemaker or as a parent.
Here the court mention about certain factors which will play a key role in the division of the property. Some of the factors include the age of both the parties; current health status of both the parties; the individual income and property of both; whether there is a child involved in the marriage who is under 18 years of age; whether each of the parties will be able to support themselves, or a child; the responsibilities of either party to support any other person; any kind of Social Security benefits; contribution made by each of the parties to the income, earning capacity, property and financial resources of the other; the longevity of the marriage and the earning of individuals and its impact on growth of property; child support rules and whether it is followed or not; and any other fact or circumstance.
In the final step, the Court determines how the property will actually be distributed and whether the distribution is just and equitable in all the circumstances. Various factors will be considered here by the court here such as the length of the marriage; working history and job prospects of both spouses; physical and mental health of both spouses; expenses for the children; and who earned the property. After considering everything, the court will make a final decision and the property will be divided. The agreement will be signed by the Judge along with both the parties involved in the divorce.
Whether you want to settle down disputes on your own or want to involve the court, it is important to obtain legal advice so as you ensure that you are aware of your entitlements and come to a satisfactory agreement plan. Before filing for divorce petition, both the parties along with their lawyers should have a discussion together on how marital assets can be divided.
Here is a video that explain the basic 4 simple steps to organize a divorce property settlement.
The Secret behind Good Divorce Property Settlement Agreement
Involvement of both the pariets is important to come up with a good divorce property settlement agreement. Another important factor is the experience of the divorce lawyers as they can help a lot in coming up with the best solutions in regards to division of property. Although it is not must to use lawyers or mediators for division of property, but appointing an experienced one can make a lot of difference.
Here is how you can help in coming up with a fair property settlement agreement:
For any property or asset owned by you and your spouse, there will be papers. So before filing for divorce you need keep all the necessary papers related to property, bank accounts, credit cards, retirement plans, and anything that comes under marital property. Keep all the documents related to property in an organized and systematic manner.
For smooth divorce process and to avoid surprises at the last minute, keep your credit report handy. Having your credit report will make the picture clear regarding debts and loans. Suppose there are some debts due to your spouse then you are not responsible for that. With credit reports in your hand, you are in a better position to come up with a fair agreement.
If you feel you do not understand something, don’t hesitate to ask your attorney about it. For instance if you might like to know about division of retirement plan ask your lawyer about it. Life after your divorce will depend a lot on the divorce property settlement agreement. So, always make sure you are sure about everything written in a paper before putting your signature.
Make a plan:
Never ignore the emotions of children during a divorce. Make a proper plan for your children as how much you will need in order to give a better life to your children, how you need to manage your finances, how much spousal support you need and so on. All these factors will be of great help for you in order to lead a better life after getting divorced.
To conclude, divorce is not the end of the world, but a new beginning to a forgotten life! So it is your duty to come up with a fair divorce property settlement agreement and then start thinking about your future.